A much quieter week in Australia with the minutes of the Reserve Bank’s board meeting on June 2 the major release.
They will be issued tomorrow morning by the RBA.
And are likely to simply reinforce the impression that while interest rates may still fall they are on hold for now given the turn for the better in economic data and the fact that rates have already been eased substantially.
The minutes will be looked at to see if there’s any further discussion of the RBA’s post meeting statement that it will look to cut rates further as inflation moderates.
Friday’s greedy 0.10% rise in variable home loan rates by the Commonwealth Bank has started the market thinking about an end to rate cuts and is pricing in three rises in the cash rate between now and the end of June 2010.
Statistics include figures on lending finance for April. That’s out today.
Foxtel CEO, Kim Williams appears at the National Press Club in Canberra tomorrow.
The NSW and Queensland state budgets will also be looked at closely given the pressure state finances are now under. Queensland lost its triple a rating in February.
Premier Anna Bligh has pre-empted the budget by revealing plans to sell $US16 billion in state assets and eliminate the half a billion dollar subsidy paid to motorists.
Securityholders in Macquarie Communications Infrastructure group meet Wednesday to vote on a scheme of arrangement takeover from a Canadian Group.
In the US a couple of business surveys will be released along with a survey of home builders and data for housing starts, industrial production and producer and consumer inflation will be released.
Inflation is likely to remain subdued and as such could help scuttle misplaced market expectations for a US interest rate hike later this year.
The house starts will be examined to see if signs of a rebound seen in the last couple of months, continued in May.
But the most important figures for the US will be the producer and consumer figures.
Industrial production and capacity utilization figures will be examined to see if the hints of a steadying in the slump, have continued, and even turned into something stronger.
What economists are looking for is a sign of a rebound in output on stock rebuilding by businesses replenishing run down stock levels.
As well, weekly initial jobless claims will also be examined to see if the falls of the past two weeks continue.
With oil prices back above $US70 a barrel, and petrol prices well above $US2.60 a gallon, inflation worries are starting to worry some analysts.
Concern about higher borrowing costs for businesses and consumers re-emerged last week as the 10-year bond yield briefly touched 4% after Wednesday’s auction of 10-year notes.
But it eased sharply on Thursday and Friday to finish the week at 3.79%.
Wall Street equity markets will have to cope with scheduled quarterly expiration of four different types of June equity futures and options contracts.
Producer prices will be released on Tuesday, followed by consumer price figures on Wednesday.
US housing starts are also expected on Tuesday, along with industrial production figures.
The Producer Price Index is expected to increase 0.6% over April after the 0.3% rise in April.
The Consumer Price Index could be up 0.3% from April’s reading of no change.
US economists expect housing starts to hit an annual rate of 490,000, up from April’s 458,000.
Building permits are expected to rise at a pace of 500,000, compared with 498,000 in April.
May industrial output, meanwhile, is expected to drop 0.9% from April.
Inflation figures will also be out in the UK and eurozone (German consumer inflation was zero, the lowest in 22 years) in April.
Production data on Friday from the eurozone surprised with a sharper than expected fall.
